STOCK EXCHANGE RELEASE
Free for publication on May 7, 2008 at 8.00 am. (EET)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY TO MARCH 2008
SUMMARY 1Q 2008
- Net sales amounted to EUR 47.3 million (EUR 31.0 million, 1Q 2007),
representing a 52.9 per cent growth year-on-year. The net sales
included extraordinary low-margin through-licensing revenues of
approximately EUR 3 million.
- Operating loss from business operations amounted to EUR -5.1
million and the non-recurring restructuring costs amounted to EUR
-2.9 million as communicated on March 27, 2008, resulting in a total
operating loss of EUR -8.0 million (EUR -7.2 million, 1Q 2007).
- EB continued to invest substantially in R&D according to strategy,
amounting in 1Q to EUR 11.6 million (24.6 per cent of net sales) of
which EUR 1.0 million were capitalised.
- Operating cash flow amounted to EUR -7.4 million. The net cash flow
amounted to EUR 13.8 million.
- Equity ratio was 69.5%.
FINANCIAL PERFORMANCE 1Q 2008
(Comparisons are given to the first quarter 2007 results, unless
otherwise indicated.)
EB's first quarter 2008 net sales increased 52.9 per cent to EUR 47.3
million, compared with EUR 31.0 million in the first quarter of 2007.
The net sales included extraordinary low-margin through-licensing
revenues of approximately EUR 3 million.
Operating loss for the first quarter, including the non-recurring
restructuring costs of EUR 2.9 million as announced in March 27,
2008, amounted to EUR -8.0 million (EUR -7.2 million).
The restructuring costs of EUR -2.9 million include the
rearrangements in the Wireless Business Segment (cost provision of
approximately EUR 2.2 million) and the sale of the shares of EB's
Swiss subsidiary, Elektrobit AG (a capital loss and a write-off
totalling in aggregate approximately to EUR 0.7 million).
The net sales of the Automotive Business Segment during the first
quarter of 2008 amounted to EUR 15.5 million (EUR 10.6 million),
representing a year-on-year growth of 45.8 per cent. The operating
loss was EUR -1.6 million (EUR -0.6 million), reflecting the
significantly increased investments in the R&D of EB's automotive
software platform products, in accordance with the strategy, as well
as marketing and sales investments to expand the business globally.
During the first quarter of 2008, the net sales of the Wireless
Business Segment, including the aforementioned extraordinary
low-margin through-licensing revenues of approximately EUR 3 million,
amounted to EUR 31.7 million (EUR 20.1 million), representing a
year-on-year growth of 58.0 per cent. The operating loss, including
the aforementioned non-recurring restructuring costs of EUR -2.9
million, was EUR -6.5 million (EUR -6.4 million) reflecting the
significant investments in the R&D of mobile WiMAX base station
module products and RFID reader systems and the weaker than expected
demand and strong price competition of the radio network solutions
R&D services.
Overall, EB continued significant investments in research and product
development, in order to develop new businesses in line with the
strategy, with the share of investments in the Automotive Business
Segment growing.
Regarding the sale of Network Test business in November 2006, based
on certain financial performance targets achieved between January 1,
and December 31, 2007, an additional purchase price component of EUR
0.4 million will be payable to EB in the second quarter of 2008.
Regarding the sales price of the Production Solutions business, there
is an additional purchase price component that will depend on the
financial performance of 2007 and 2008. No additional payment for
2007 is due.
CONSOLIDATED INCOME STATEMENT (MEUR) 1Q 2008 1Q 2007
3 months 3 months
NET SALES 47.3 31.0
OPERATING PROFIT (LOSS) -8.0 -7.2
Financial income and expenses 0.4 0.8
PROFIT BEFORE TAX -7.7 -6.4
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS -7.7 -6.3
Profit after tax for the year from discontinued 0.0
operations -1.8
PROFIT FOR THE YEAR -7.7 -8.1
Attributable to
Equity holders of the parent -7.7 -8.1
Minority interest 0.0 0.0
Earnings per share EUR continuing operations -0.06 -0.05
Earnings per share EUR discontinued operations -0.00 -0.01
Earnings per share EUR continuing and discontinued -0.06
operations -0.06
- Cash flow from operations amounted to EUR -7.4 million (EUR -5.5
million).
- Equity ratio was 69.5% (68.6%).
- Net gearing was -35.0% (-37.0).
QUARTERLY FIGURES
The quarterly distribution of the Group's overall net sales and
profit, MEUR:
+------------------------------------------------------------+
| | 1Q08 | 4Q07 | 3Q07 | 2Q07 | 1Q07 |
|-------------------------+------+------+------+------+------|
| Net sales | 47.3 | 44.6 | 35.3 | 33.5 | 31.0 |
|-------------------------+------+------+------+------+------|
| Operating profit (loss) | -8.0 | -2.4 | -4.0 | -6.6 | -7.2 |
|-------------------------+------+------+------+------+------|
| Result before taxes | -7.7 | -3.3 | -4.0 | -6.3 | -6.4 |
|-------------------------+------+------+------+------+------|
| Result for the period | -7.7 | -3.3 | -4.0 | -6.4 | -6.3 |
+------------------------------------------------------------+
The distribution of the net sales by Business Segment, MEUR:
+------------------------------------------------------+
| | 1Q08 | 4Q07 | 3Q07 | 2Q07 | 1Q07 |
|-------------------+------+------+------+------+------|
| Automotive | 15.5 | 16.2 | 14.5 | 11.2 | 10.6 |
|-------------------+------+------+------+------+------|
| Wireless | 31.7 | 28.2 | 20.4 | 22.2 | 20.1 |
|-------------------+------+------+------+------+------|
| Corporation Total | 47.3 | 44.6 | 35.3 | 33.5 | 31.0 |
+------------------------------------------------------+
The distribution of the net sales by market area, MEUR (%):
+------------------------------------------------------------+
| | 1Q08 | 4Q07 | 3Q07 | 2Q07 | 1Q07 |
|----------+---------+---------+---------+---------+---------|
| Asia | 2.0 | 2.0 | 4.4 | 0.6 | 2.5 |
| | (4.3%) | (4.5%) | (12.5%) | (1.7%) | (8.0%) |
|----------+---------+---------+---------+---------+---------|
| Americas | 18.5 | 14.5 | 7.4 | 7.3 | 4.1 |
| | (39.2%) | (32.5%) | (20.9%) | (21.7%) | (13.4%) |
|----------+---------+---------+---------+---------+---------|
| Europe | 26.8 | 28.1 | 23.5 | 25.7 | 24.3 |
| | (56.5%) | (63.0%) | (66.5%) | (76.6%) | (78.6%) |
+------------------------------------------------------------+
Net sales (external) and operating profit development by Business
Segments and Other businesses were as follows, MEUR:
+-------------------------------------------------------------------+
| | 1Q08 | 4Q07 | 3Q07 | 2Q07 | 1Q07 |
|---------------------+------+------+--------+--------+-------------|
| Automotive | | | | | |
| Net sales | 15.5 | 16.2 | 14.5 | 11.2 | 10.6 |
| Operating profit | -1.6 | 1.0 | 0.5 | -0.2 | -0.6 |
| (loss) | | | | | |
|---------------------+------+------+--------+--------+-------------|
| Wireless | | | | | |
| Net sales | 31.7 | 28.2 | 20.4 | 22.2 | 20.1 |
| Operating profit | -6.5 | -4.1 | -5.2 | -7.1 | -6.4 |
| (loss) | | | | | |
|---------------------+------+------+--------+--------+-------------|
| Other businesses | | | | | |
| Net sales | 0.1 | 0.1 | 0.3 | 0.1 | 0.3 |
| Operating profit | 0.1 | 0.7 | 0.7 | 0.7 | -0.2 |
| (loss) | | | | | |
|---------------------+------+------+--------+--------+-------------|
| Total | | | | | |
| Net sales | 47.3 | 44.6 | 35.3 | 33.5 | 31.0 |
| Operating profit | -8.0 | -2.4 | -4.0 | -6.6 | -7.2 |
| (loss) | | | | | |
+-------------------------------------------------------------------+
BUSINESS SEGMENTS
EB's reporting as from January 1, 2008 is based on the Automotive and
Wireless Business Segments. This will be reflected in the further
development of the company's organisation and operational mode.
BUSINESS SEGMENTS' MAIN EVENTS DURING THE FIRST QUARTER OF 2008 AND
MARKET OUTLOOK
AUTOMOTIVE BUSINESS SEGMENT
The Automotive Business Segment consists of in-car software products,
navigation software for after market devices (personal navigation
devices) and R&D services for the automotive industry with leading
car manufacturers, car electronics (Tier 1) and automotive chipset
suppliers as customers.
During the first quarter of 2008, the net sales of the Automotive
Business Segment amounted to EUR 15.5 million (EUR 10.6 million in 1Q
2007), which represents a strong year-on-year growth of 45.8 per
cent. The operating loss was EUR -1.6 million (EUR -0.6 million)
reflecting the increased investments in the R&D of EB's automotive
software platform products, in accordance with the strategy, and
marketing and sales investments to expand the business globally. EB
aims to continue to increase the share of automotive software
products and services in the company's net sales.
EB's navigation software won its first commitments from Automotive
OEMs to install it as an application SW in their head units as an
original line-fit, in-dash software. In the American market, EB's
automotive software has made positive inroads to start working in
important elements of OEM's infotainment solutions.
The R&D investments were focused on the development of continued
success and competitiveness of the navigation solution, HMI
(infotainment user interface) tooling and framework environment, as
well as for a rich configuration, runtime and validation environment
for the in-car Electronic Control Unit (ECU) software.
WIRELESS BUSINESS SEGMENT
The net sales of the Wireless Business Segment from January to March
2008 amounted to EUR 31.7 million (EUR 20.1 million in 1Q 2007)
representing a year-on-year growth of 58.0 per cent. The net sales
included extraordinary low-margin through-licensing revenues of
approximately EUR 3 million.
The operating loss of the Wireless Business Segment in the first
quarter of 2008, including a non-recurring restructuring cost of EUR
-2.9 million, was EUR -6.5 million (EUR -6.4 million). Compared to
the corresponding period in 2007, the profitability without the
non-recurring cost was improved mainly due to a good level of
resource utilisation of the mobile terminal solutions business. The
profitability reflected the significant investments in the R&D of
mobile WiMAX base station module products and RFID reader systems and
the weaker than expected demand and strong price competition of the
radio network solutions R&D services.
During the 1Q 2008, the development of handset technologies and
reference designs for TerreStar Networks' upcoming
satellite-terrestrial all-IP mobile network continued as planned. EB
signed a contract with the Finnish Armed Forces Technical Research
Center to develop a Software Defined Radio (SDR) prototype for
tactical communications. The prototype will be used in national and
European software radio development activities. In February, NextWave
Wireless demonstrated successfully VoIP calling over mobile WiMAX in
a handset form-factor at the 2008 GSMA Mobile World Congress in
Barcelona, Spain. In this development, EB worked as the main platform
integrator.
In March, EB started personnel negotiations to adjust the fixed cost
level and resources of the radio network solutions business. The
negotiations concern approximately 40 employees mainly in Oulu and
Kajaani. EB continued to invest in the product development associated
with mobile WiMAX base stations technology.
New wireless communications tools product releases included EB
Propsim FE version for 3GPP LTE testing and new add-on features to
the EB Propsim product portfolio. Spearheading emulator deliveries
were made in the aerospace and satellite communications industries in
America. The R&D investments were targeted at renewing and extending
the current product portfolio in order to maintain technology and
product leadership.
In March, EB decided to examine the possibility of renouncing the
main part of the production activities of wireless communications
tools. Going forward, EB intends to buy non-core production services
from its outsourcing partners, aiming at improving the cost
efficiency and flexibility of its supply chain. However, the final
assembly, configuration, testing and service operations of wireless
communications tools will be maintained within EB.
EB progressed in the product development programs of RFID reader
systems. In March, the sale of Elektrobit AG in Switzerland and
consolidation of EB's RFID development to Graz, Austria was
announced. The sale was concluded on March 31, 2008. The Swiss
subsidiary, Elektrobit AG, was sold to the acting management of the
said company. Under the new ownership the company will concentrate on
developing products related to wireless industrial solutions and
providing R&D services while acting also as EB's subcontractor. The
arrangements will not change EB's strategy to deliver RFID reader
system solutions.
Market Outlook
The share of electronics and software in cars has grown and it is
expected that the trend for increased use of software continues to
prevail in the market. Additionally, the use of standard software
solutions is expected to increase. The automotive embedded software
market is expected to enjoy a 15 per cent Compound Annual Growth Rate
(CAGR) during 2005-2009 in North America and Europe (Frost &
Sullivan).
The volume share of smartphones is expected to continue to grow due
to the rapid increase in demand for new features and services
(Canalys). New multi-radio combinations and software platforms are
creating new business opportunities.
The value chain and hence the horizontal technology and product
market for mobile WiMAX is still in a forming phase, and as a result,
the commercial market start has delayed. In early April, the main
mobile WiMAX operator services market in America was announced to
start "later in the year" 2008.
The wireless communications tools market is predicted to expand
moderately, as the development of new cellular technologies,
enhancements to existing technologies (HSDPA, HSUPA, 3GPP LTE, MIMO)
and new non-cellular technologies (mobile WiMAX, WiBRO) are
generating demand for test system replacements and for new test
systems. Wireless applications for aerospace and defence industries,
especially in America, are becoming an important opportunity for the
air-interface emulator providers.
The UHF (Ultra High Frequency) RFID reader system market volume
growth has been delayed from the earlier expected. The RFID market is
expected to start moving gradually from trials and pilots to
commercial deployments. The global RFID reader market is estimated to
grow with a CAGR of over 20 per cent for the period of 2006 to 2011
(VDC).
RESEARCH AND DEVELOPMENT DURING THE FIRST QUARTER OF 2008
EB continued to invest, according to the strategy, in the following
development areas:
- Development of automotive software platform based products
- Development of mobile WiMAX radio base station module products
- Development of the radio channel emulation product portfolio
- Development of RFID reader systems product portfolio
- Technical core competence areas as defined in the strategy.
The total R&D expenses during the 1Q 2008 were EUR 11.6 million (EUR
7.3 million in the corresponding period in 2007), equalling 24.6 per
cent of the net sales (23.4% in 2007). EUR 1.0 million of them were
capitalised.
OUTLOOK FOR THE FIRST HALF OF 2008
EB expects the net sales during the first half of 2008 to grow
clearly compared to the second half of 2007 (EUR 79.9 million) with
the net sales of the latter part of the half being roughly at the
level of the beginning of the year.
The company's R&D investments during the first half of 2008 will
remain roughly at the level of the second half of 2007, with the
share of the investments in the Automotive Business Segment growing
further. The company will continue to invest in:
- Automotive software platform based products
- Developing of mobile WiMAX radio base station module products
- Developing the radio channel emulation product portfolio.
- Developing the RFID reader systems product portfolio
- The technical core competence areas defined in the strategy
- Expanding the geographical market presence of the company
- Further developing efficient and unified structures and platforms
to enable global business operations in accordance with the strategy.
EB expects the operating loss from business operations, without
non-recurring items, in the first half of 2008 to be roughly at the
same level as the operating loss from business operations without
non-recurring items in the second half of 2007 (MEUR -7.9). The
non-recurring items improved the operating loss in the second half of
2007 by MEUR +1.5 and will affect negatively the operating loss in
the first half of 2008 by MEUR -2.9.
RISKS AND UNCERTAINTIES
EB follows a risk management policy with the objective of covering
risks related to business operations, properties, agreements,
competences, currencies, financing and strategy. The company has
identified risks and uncertainties related to such issues as
strategy, business operations, personnel, product development,
product liability, property and financing.
Among others, the following risks are related to the company's
business operations in the ongoing financial period:
In R&D services businesses the risks are mainly related to
uncertainties of customers' product program decisions, their make or
buy decisions and, on the other hand, their decisions to continue,
downsize or terminate current product programs, ramping up of project
resources, timing of the most important technology components and,
competitive situation in the market, which all may affect the R&D
service demand and price levels. Further, there are typical industry
warranty and liability risks involved in selling R&D services.
Additional risks emanate from ongoing restructuring of the
telecommunications infrastructure industry.
In the technology product businesses the risks are related to
potential market delays (in particular in the areas of Mobile WiMAX
and RFID reader systems), to size, timing and short visibility of the
customers' product purchases and orders, timely closing of customer
contracts, delays in R&D projects, activations based on customer
contracts, obsolescence of inventories and technology risks in
product development causing higher than planned R&D costs. Revenues
expected to come from new products for existing and new customers
include normal timing risks.
More information on the risks and uncertainties affecting EB can be
found on the company website at www.elektrobit.com/aboutelektrobit.
BALANCE SHEET AND FINANCING
The figures presented in the balance sheet of March 31, 2008, have
been compared with the balance sheet of December 31, 2007
(EUR 1,000).
3/2008 12/2007
Non-current assets 66,374 77,196
Current assets 159,594 158,918
Total assets 225,968 236,114
Share capital 12,941 12,941
Other equity 142,342 152,710
Minority interest 0 0
Total shareholders' equity 155,283 165,651
Non-current liabilities 28,728 28,937
Current liabilities 41,957 41,526
Total shareholders' equity and liabilities 225,968 236,114
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR -2.2 million
- increase in net working capital EUR -4.4 million
+ interest, taxes and dividends EUR -0.8 million
= cash generated from operations EUR -7.4 million
- net cash used in investment activities EUR +25.7 million
- net cash used in financing EUR -4.5 million
= net change in cash and cash equivalents EUR +13.8 million
The amount of accounts and other receivables, booked in current
receivables, was EUR 64.9 million (EUR 78.8 million on December 31,
2007). Accounts and other payables, booked in interest-free current
liabilities, were at EUR 34.5 million (EUR 33.2 million on December
31, 2007).
The amount of non-depreciated consolidation goodwill at the end of
the period under review was EUR 19.6 million (EUR 19.6 million on
December 31, 2007).
The amount of investments, excluding the termination of a long-term
investment portfolio, in the period under review was EUR 2.9 million,
consisting of replacement investments, and items created by the sales
of Elektrobit AG. Net investments for the reporting period totalled
to EUR -7.9 million. The total amount of depreciation during the
period under review was EUR 3.2 million, including EUR 0.7 million of
depreciation owing to business acquisitions.
The amount of interest-bearing debt at the end of the reporting
period was EUR 31.4 million. The distribution of net financing
expenses on the income statement was as follows:
interest, dividend and other financial income EUR 1.2 million
interest expenses and other financial expenses EUR -2.2 million
foreign exchange gains and losses EUR 1.4 million
EB's equity ratio at the end of the period was 69.5 per cent
(compared with 70.9 per cent at the end of 2007).
The figures from the period under review do not include any of the
statutory reserves.
EB follows a currency strategy, the objective of which is to ensure
the margins of business operations in changing market circumstances
by minimising the influence of exchange rates. In accordance with the
principles of the currency strategy, the upcoming 12-month net cash
flow of the currency in question is hedged. The net cash flow is
determined on the basis of sales receivables, payables, the order
book and the budgeted net currency cash flow. The hedged foreign
currency exposure at the end of the review period was equivalent to
EUR 43.2 million.
PERSONNEL
EB employed an average of 1771 people between January and March 2008.
At the end of March, EB had 1762 employees (1725 at the end of 2007).
A significant part of EB's personnel are product development
engineers.
OPTION RIGHTS
The Annual General Meeting held on March 14, 2008, approved a
proposal by the Board of Directors to issue stock options to key
personnel of the Elektrobit Group as follows.
There is a weighty financial reason for the company to issue stock
options since the stock options are intended for use as part of the
incentive and commitment program for key personnel.
The maximum total number of stock options shall be 4,200,000, of
which 1,400,000 shall be marked with the symbol 2008A, 1,400,000
shall be marked with the symbol 2008B and 1,400,000 shall be marked
with the symbol 2008C. The stock options entitle to subscription of a
maximum total of 4,200,000 new shares of the company or treasury
shares. The proportion of the shares that can be subscribed using the
stock options to be issued will be a maximum total of 3.1 per cent of
the company's shares and associated voting rights after a possible
share subscription, should new shares be issued in the subscription.
The subscription price for the shares to be subscribed based on the
stock options shall be based on the prevailing market value of the
Elektrobit Corporation share at OMX Nordic Exchange Helsinki Ltd in
January 2009, January 2010 and January 2011. The subscription price
will be recorded in the fund for invested unrestricted equity.
The share subscription period for stock options 2008A shall be 1
April 2012-31 March 2014, for stock options 2008B 1 April 2013-31
March 2015, and for stock options 2008C 1 April 2014-31 March 2016.
THE AUTHORISATIONS OF THE BOARD OF DIRECTORS AT THE END OF THE
REPORTING PERIOD
The Annual General Meeting held on March 14, 2008, resolved to
authorize the Board of Directors to repurchase shares of the company
as follows. The number of repurchased shares shall not exceed
12,500,000 shares, which represents approximately 9.66 per cent of
all the shares of the company. Only unrestricted equity of the
company can be used to repurchase shares on the basis of the
authorization. Shares can be repurchased at a price formed in public
trading on the date of repurchase or otherwise at a price formed on
the market. The Board of Directors shall resolve how the repurchase
of shares is carried out. The repurchase can be carried out by using,
among others, derivatives. Shares may be repurchased in deviation
from the shareholder's pre-emptive rights (directed repurchase of
shares). The authorization is effective until 30 June 2009.
The Annual General Meeting held on March 14, 2008, authorized the
Board of Directors to resolve on the issuance of shares and of stock
options and other special rights entitling to shares referred to in
chapter 10, section 1 of the Companies Act as follows. The aggregate
number of shares issued on the basis of the authorization may not
exceed 25,000,000 shares, which represents approximately 19.32 per
cent of all the current shares of the company. The Board of Directors
is authorized to resolve on all the terms and conditions concerning
the issuance of shares and of special rights entitling to shares. The
authorization concerns both the issuance of new shares and the
transfer of treasury shares. Issuance of shares and of special rights
entitling to shares can be carried out in deviation from the
shareholder's pre-emptive rights (directed issue). The authorization
is effective until 30 June 2009.
FLAGGING NOTIFICATIONS
There were no changes in ownership during the period under review
that would have caused flagging notifications which are obligations
for disclosure in accordance with Chapter 2, section 9 of the
Securities Market Act.
BOARD OF DIRECTORS AND AUDITOR
The Annual General Meeting held on March 14, 2008, fixed the number
of Board members to six (6). Mr. J.T. Bergqvist, Mr. Jukka Harju, Mr.
Juha Hulkko, Mr. Seppo Laine, Mr. Staffan Simberg and Mr. Erkki
Veikkolainen were elected Board members. The term of office of the
Board members expires at the end of the next Annual General Meeting.
The Annual General Meeting elected Ernst & Young Oy, an auditing
entity authorized by the Central Chamber of Commerce, as the auditor
of the company.
DIVIDEND FROM 2007
The Annual General Meeting held on March 14, 2008, approved a
proposal by the Board of Directors to pay a dividend of EUR 0.02 per
share, i.e. a total of EUR 2,588,253.80. The dividend was paid on 28
March 2008.
AMENDMENT OF THE ARTICLES OF ASSOCIATION
Section 1 is amended so that the company's domicile is Oulu. Section
2 concerning the company's field of activities is updated as follows:
The company's field of activities is the development, production and
selling of software, equipment and other products for the automotive
and electronics industry, the production of R&D services and other
services as well as other industrial operations. The company may
administer product and other rights and conduct research- and
development operations, hold and trade securities and real-estate and
conduct other investment activities.
Oulunsalo, May 7, 2008
EB, Elektrobit Corporation
The Board of Directors
Further Information:
Pertti Korhonen
CEO
Tel. +358 40 344 5148
Panu Miettinen
CFO
Tel. +358 40 344 5338
Distribution:
OMX Nordic Exchange Helsinki
Principal media
INVITATION TO PRESS CONFERENCE ON EB'S Q1 RESULT
EB, Elektrobit Corporation, will hold a press conference for media,
analysts and institutional investors concerning the Interim Report Q1
2008 on
May 7, 2008 at 12.00 - 13.00 hours (EET)
in Helsinki
Restaurant Savoy
Eteläesplanadi 14
Cabinet Banquet, 7th floor
The conference will be audio webcast and published live on the
Internet on
http://194.100.179.139:80/wip/directlink.do?newbrowser=1&pid=2216074.
There will be a possibility to present questions in place as well as
by calling to the following conference call numbers:
Participants - Finland and other Europe: +358 (0)9 2313 9202
Participants - UK: +44 (0)20 7162 0125
Participants - US: +1 334 323 6203
An on-demand version of the audio webcast will be available after the
conference on EB's website www.elektrobit.com/investors. The
presentation material will be available after the publication of the
Interim Report on the same address.
CONSENSUS ESTIMATE
The EB consensus estimate made by the analysts who observe the
company is updated approximately a week before the release of the
financial report. The latest estimate is available on the company
website www.elektrobit.com/investors.
April 30, 2008
EB, Elektrobit Corporation
Corporate Communications
ELEKTROBIT CORPORATION, INTERIM REPORT JANUARY - MARCH 2008
(unaudited)
The Interim Report has been prepared in accordance with IAS 34
Interim Financial Reporting.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-3/2008 1-3/2007 1-12/2007
3 months 3 months 12 months
NET SALES 47.3 31.0 144.3
Other operating income 1.4 0.6 14.4
Change in work in progress and finished
goods -0.6 1.9 1.5
Work performed by the undertaking for
its own purpose
and capitalized 0.1 0.0 0.5
Raw materials -5.6 -2.0 -10.1
Personnel expenses -27.2 -23.4 -96.5
Depreciation -3.2 -2.3 -15.9
Other operating expenses -20.2 -12.9 -58.5
OPERATING PROFIT (LOSS) -8.0 -7.2 -20.3
Financial income and expenses 0.4 0.8 0.3
RESULT BEFORE TAXES -7.7 -6.4 -20.0
Income taxes -0.0 0.1 0.0
RESULT FOR THE PERIOD FROM CONTINUING
OPERATIONS -7.7 -6.3 -20.0
Result after taxes for the period from
discontinued
Operations 0.0 -1.8 13.1
RESULT FOR THE PERIOD -7.7 -8.1 -6.9
Attributable to
Equity holders of the parent -7.7 -8.1 -6.9
Minority interest 0.0 -0.0 0.0
Earnings per share EUR continuing
operations
Basic earnings per share -0.06 -0.05 -0.15
Diluted earnings per share -0.06 -0.05 -0.15
Earnings per share EUR discontinued
operations
Basic earnings per share 0.0 -0.01 0.10
Diluted earnings per share 0.0 -0.01 0.10
Earnings per share EUR continuing and
discontinued
Operations
Basic earnings per share -0.06 -0.06 -0.05
Diluted earnings per share -0.06 -0.06 -0.05
Average number of shares, 1000 pcs 129 413 129 413 129 413
CONSOLIDATED BALANCE SHEET (MEUR) March 31, March 31, Dec. 31,
2008 2007 2007
ASSETS
Non-current assets
Property, plant and equipment 24.5 34.6 25.1
Goodwill 19.6 16.2 19.6
Intangible assets 18.2 10.6 18.0
Financial assets at fair value
through profit or loss 0.0 10.8 10.8
Other financial assets 0.4 0.1 0.3
Receivables 0.7 0.2 0.7
Deferred tax assets 3.0 3.5 2.8
Non-current assets total 66.4 76.0 77.2
Current assets
Inventories 7.4 16.3 7.6
Trade and other receivables 64.9 52,7 78,8
Financial assets at fair value
through profit or loss 1.6 72.3 50.9
Cash and short term deposits 85.7 24.4 21.6
Current assets total 159.6 165.6 158.9
TOTAL ASSETS 226.0 241.6 236.1
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital 12.9 12.9 12.9
Share premium 64.6 64.6 64.6
Translation difference -0.8 -0.2 -0.4
Retained earnings 78.6 87.0 88.5
Minority interest 0.0 0.0 0.0
Total equity 155.3 164.3 165.7
Non-current liabilities
Deferred tax liabilities 4.2 6.3 4.4
Interest-bearing liabilities 23.9 22.3 23.9
Other liabilities 0.6 0.3 0.6
Non-current liabilities total 28.7 28.9 28.9
Current liabilities
Trade and other payables 33.4 34.1 31.1
Pension obligations 1.1 0.8 0.9
Current tax liabilities 0.0 0.0 1.2
Interest-bearing loans and borrowings 7.5 13.6 8.3
Current liabilities total 42.0 48.5 41.5
Total liablities 70.7 77.3 70.5
TOTAL EQUITY AND LIABILITIES 226.0 241.6 236.1
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-3/2008 1-3/2007 1-12/2007
3 months 3 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -7.7 -8.1 -6.9
Adjustment of accrual basis items 5.5 1.8 -6.4
Change in net working capital -4.4 0.1 -11.6
Interest paid on operating activities -1.5 -0.5 -1.8
Interest received from operating
activities 1.5 1.2 1.5
Other financial income and expenses, net
received 0.0 0.0 0.0
Income taxes paid -0.9 0.0 -1.9
NET CASH FROM OPERATING ACTIVITIES -7.4 -5.5 -27.1
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit, net of cash
acquired -4.7
Acquisition of minority interest -10.2 -10.2
Disposal of business unit, net of cash
acquired 17.5 0.7 16.9
Purchase of property, plant and equipment -0.3 -1.6 -3.9
Purchase of intangible assets -1.5 -1.0 -6.3
Purchase of other investments -0.5 -1.2 -3.9
Sale of property, plant and equipment 0.0 0.1 0.5
Sale of intangible assets 0.4 1.1
Proceeds from sale of investments 10.4 1.1 3.7
NET CASH FROM INVESTING ACTIVITIES 25.7 -11.7 -6.8
CASH FLOW FROM FINANCING ACTIVITIES
Loans granted -0.5
Proceeds from borrowing 0.1 3.0 8.2
Repayment of borrowing -0.8 -1.1 -7.6
Payment of finance liabilities -1.5 -1.1 -5.1
Dividends paid -2.2 -12.1 -14.2
NET CASH FROM FINANCING ACTIVITIES -4.5 -11.3 -19.3
NET CHANGE IN CASH AND CASH EQUIVALENTS 13.8 -28.5 -53.2
Cash and cash equivalents at beginning of
period 71.9 125.1 125.1
Cash and cash equivalents at end of
period 85.7 96.6 71.9
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (MEUR)
A = Share capital
B = Share premium
C = Retained earnings
D = Net profit for the period
E = Minority interest
F = Total equity
A B C D E F
Equity on January 1, 2007 12.9 64.6 108.9 2.1 188.6
Result for the period -8.1 -8.1
Dividend distribution -14.2 -14.2
Share-related compensation 0.3 0.3
Translation difference -0.0 -2.1 -2.1
Others -0.1 -0.1
Equity on March 31, 2007 12.9 64.6 94.9 -8.1 0.0 164.3
Equity on January 1, 2008 12.9 64.6 88.1 165.7
Result for the period -7.7 -7.7
Dividend distribution -2.6 -2.6
Share-related compensation 0.3 0.3
Translation difference -0.4 -0.4
Others 0.0 0.0
Equity on March 31, 2008 12.9 64.6 85.4 -7.7 155.3
NOTES TO THE INTERIM REPORT
Accounting principles for the Interim Report:
The same accounting policies and methods of computation are followed
in the financial statement bulletin as compared with annual financial
statements.
Explanatory comments about the seasonality or cyclicality of
reporting period operations:
The company operates in business areas which are subject to seasonal
fluctuations.
The nature and amount of items affecting assets, liabilities, equity,
net income, or cash flows which are unusual because of their nature,
size or incidence:
The investment portfolio in the non-current assets worth of EUR 10.6
million was dissolved and the amount was transferred into assets
during the reporting period. The cash flow from investments during
the reporting period includes the sale price payment of EUR 13.1
million from the property sales transaction done in December.
Dividends paid:
According to the decision of the company's Annual Shareholders'
Meeting held on March 14, 2008, dividend of EUR 0.02 per share, a
total of EUR 2,588,253.80 was paid on March 28, 2008
SEGMENT INFORMATION (MEUR) 1-3/2008 1-3/2007 1-12/2007
3 months 3 months 12 months
Automotive
Net sales to external customers 15.5 10.6 52.6
Net sales to other segments 0.0 0.0 0.0
Net sales total 15.5 10.6 52.7
Operating profit (loss) -1.6 -0.6 0.7
Wireless
Net sales to external customers 31.7 20.1 90.9
Net sales to other segments 0.0 0.3 0.8
Net sales total 31.7 20.4 91.7
Operating profit (loss) -6.5 -6.4 -22.8
Other businesses
Net sales to external customers 0.1 0.3 0.8
Net sales to other segments 0.0 0.0 0.0
Net sales total 0.1 0.3 0.8
Operating profit (loss) 0.1 -0.2 1.8
Eliminations
Net sales to external customers 0.0 0.0 0.0
Net sales to other segments -0.0 -0.3 -0.8
Net sales total -0.0 -0.3 -0.8
Operating profit (loss) 0.0 0.0 0.0
Group total
Net sales to external customers 47.3 31.0 144.3
Operating profit (loss) -8.0 -7.2 -20.3
Net sales of geographical segments (MEUR) 1-3/2008 1-3/2007 1-12/2007
3 months 3 months 12 months
Net sales
Europe 26.8 24.3 101.6
Americas 18.5 4.1 33.3
Asia 2.0 2.5 9.5
Net sales total 47.3 31.0 144.3
Material events subsequent to the end of the interim period that have
not been reflected in the financial statements for the interim
period:
There were no material events subsequent to the end of the interim
period.
The effect of changes in the composition of the group structure
during the interim period:
During the reporting period, EB sold 100 per cent of the share
capital of Elektrobit AG.
Related party transactions: 1-3/2008 1-3/2007 1-12/2007
Employee benefits for key management and
stock
option expenses total 0.6 0.7 2.5
Loans and guarantees to related party
There have not been other transactions
between the
related parties
INCOME STATEMENT BY 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
QUARTER (MEUR) 2008 2007 2007 2007 2007
3 months 3 months 3 months 3 months 3 months
NET SALES 47.3 44.6 35.3 33.5 31.0
Other operating income 1.4 10.7 0.9 2.2 0.6
Change in work in
progress and
finished goods -0.6 -1.1 0.1 0.6 1.9
Work performed by the
undertaking
for its own purpose and
capitalized 0.1 0.1 0.2 0.2 0.0
Raw materials -5.6 -3.1 -2.5 -2.4 -2.0
Personnel expenses -27.2 -26.6 -22.6 -23.9 -23.4
Depreciation -3.2 -7.6 -3.5 -2.5 -2.3
Other operating
expenses -20.2 -19.5 -11.8 -14.3 -12.9
OPERATING PROFIT (LOSS) -8.0 -2.4 -4.0 -6.6 -7.2
Financial income and
expenses 0.4 -0.9 0.0 0.3 0.8
RESULT BEFORE TAXES -7.7 -3.3 -4.0 -6.3 -6.4
Income taxes -0.0 0.0 0.0 -0.1 0.1
RESULT FOR THE PERIOD
FROM
CONTINUING OPERATIONS -7.7 -3.3 -4.0 -6.4 -6.3
Result after taxes for
the period from
discontinued operations 0.0 0.4 -0.0 14.5 -1.8
RESULT FOR THE PERIOD -7.7 -2.9 -4.0 8.1 -8.1
Attributable to
Equity holders of the
parent -7.7 -2.9 -4.0 8.1 -8.1
Minority interest 0.0 0.0 0.0 0.0 -0.0
BALANCE SHEET BY March 31, Dec. 31, Sept. June 30, March
QUARTER 30, 31,
(MEUR) 2008 2007 2007 2007 2007
ASSETS
Non-current assets
Property, plant and
equipment 24.5 25.1 35.3 35.0 34.6
Goodwill 19.6 19.6 21.7 21.1 16.2
Intangible assets 18.2 18.0 17.5 16.8 10.6
Financial assets at
fair value
through profit or
loss 0.0 10.8 10.9 10.9 10.8
Other financial
assets 0.4 0.3 0.3 0.4 0.1
Receivables 0.7 0.7 0.2 0.1 0.2
Deferred tax assets 3.0 2.8 4.2 3.5 3.5
Non-current assets
total 66.4 77.2 90.1 87.7 76.0
Current assets
Inventories 7.4 7.6 8.7 8.8 16.3
Trade and other
receivables 64.9 78.8 53.7 53.7 52.7
Financial assets at
fair value
through profit or
loss 1.6 50.9 70.8 81.0 72.3
Cash and short term
deposits 85.7 21.6 12.0 17.8 24.4
Current assets total 159.6 158.9 145.2 161.3 165.6
TOTAL ASSETS 226.0 236.1 235.3 249.1 241.6
EQUITY AND LIABILITIES
Equity attributable to
equity holders
of the parent
Share capital 12.9 12.9 12.9 12.9 12.9
Share premium 64.6 64.6 64.6 64.6 64.6
Translation
difference -0.8 -0.4 -0.3 -0.1 -0.2
Retained earnings 78.6 88.5 91.1 94.9 87.0
Minority interest 0.0 0.0 0.0 0.0 0.0
Total equity 155.3 165.7 168.4 172.3 164.3
Non-current liabilities
Deferred tax
liabilities 4.2 4.4 5.2 5.6 6.3
Interest-bearing
liabilities 23.9 23.9 23.8 28.0 22.3
Other liabilities 0.6 0.6 0.7 0.7 0.3
Non-current liabilities
total 28.7 28.9 29.7 34.3 28.9
Current liablities
Trade and other
payables 33.4 32.3 27.2 30.8 34.1
Pension obligations 1.1 0.9 1.1 0.9 0.8
Interest-bearing
loans and
borrowings
(non-current) 7.5 8.3 8.9 10.7 13.6
Current liabilities
total 42.0 41.5 37.2 42.4 48.5
Total liablities 70.7 70.5 66.9 76.8 77.3
TOTAL EQUITY AND
LIABILITIES 226.0 236.1 235.3 249.1 241.6
CONSOLIDATED CASH FLOW 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
STATEMENT BY QUARTER 2008 2007 2007 2007 2007
3 months 3 months 3 months 3 months 3 months
Net cash from
operating activities -7.4 -8.6 -6.7 -6.2 -5.5
Net cash from
investing activities 25.7 -0.7 -5.6 11.2 -11.7
Net cash from
financing activities -4.5 -1.4 -3.8 -2.9 -11.3
Net change in cash and
cash
equivalents 13.8 -10.8 -16.1 2.1 -28.5
FINANCIAL PERFORMANCE RELATED RATIOS 1-3/2008 1-3/2007 1-12/2007
3 months 3 months 12 months
INCOME STATEMENT (MEUR)
Net sales 47.3 31.0 144.3
Operating profit (loss) -8.0 -7.2 -20.3
Operating profit (loss), % of net
sales -16.9 -23.3 -14.1
Result before taxes -7.7 -6.4 -20.0
Result before taxes, % of net sales -16.2 -20.8 -13.9
Result for the period -7.7 -6.3 -20.0
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities,
(MEUR) -54.3 -60.8 -39.7
Net gearing, -% -35.0 -37.0 -24.0
Equity ratio, % 69.5 68.6 70.9
Gross investments, (MEUR) 3.7 15.2 44.1
Average personnel during the period 1771 1597 1695
Personnel at the period end 1762 1602 1725
AMOUNT OF SHARE ISSUE ADJUSTMENT March 31, March 31, Dec. 31,
(1,000 pcs) 2008 2007 2007
At the end of period 129 413 129 413 129 413
Average for the period 129 413 129 413 129 413
Average for the period diluted with
stock options 129 413 129 413 129 413
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-3/2008 1-3/2007 1-12/2007
3 months 3 months 12 months
Basic earnings per share -0.06 -0.05 -0.15
Diluted earnings per share -0.06 -0.05 -0.15
Equity *) per share 1.20 1.27 1.28
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES 1-3/2008 1-3/2007 1-12/2007
(EUR)
Highest 1.79 2.48 2.48
Lowest 1.42 1.61 1.51
Average 1.67 2.09 1.93
At the end of period 1.43 1.62 1.64
Market value of the
stock, (MEUR) 185.1 209.6 212.2
Trading value of shares,
(MEUR) 3.9 30.5 53.4
Number of shares traded,
(1,000 pcs) 2 351 14 616 27 656
Related to average number
of shares % 1.82 11.3 21.4
SECURITIES AND CONTINGENT March 31, March 31, Dec. 31,
LIABILITIES
(MEUR) *) 2008 2007 2007
AGAINST OWN LIABILITIES
Floating charges 3.1 3.0 3.1
Mortgages 7.0 18.0 7.0
Pledges 9.5 7.4 9.8
Guarantees 2.1 2.1
Mortgages are pledged for
liabilities totalled 16.8 13.0 17.3
OTHER DIRECT AND
CONTINGENT LIABILITIES
Rental liabilities
Falling due in the
next year 4.4 2.9 4.0
Falling due after one
year 6.4 3.4 4.9
*) The comparison data
does not include
contingent
liabilities relating
to discontinued
operations
NOMINAL VALUE OF CURRENCY March 31, 2008 March 31, 2007 Dec. 31, 2007
DERIVATIVES (MEUR)
Foreign exchange forward
contracts
Market value 1.6 0.0 0.7
Nominal value 43.2 13.5 26.4
